Strengthening Spaza Shops

MISSION STATEMENT AND OBJECTIVES

The goal of our project was to help spaza shops to grow into sustainable and financially stable micro-enterprises in Monwabisi Park by studying the existing spaza market in the area, then adapting the Triple Trust Organisation’s Shop-Net programme to Monwabisi Park, facilitating business skills training for spaza shop owners, and coordinating the formation of a Monwabisi Park spaza association.

Our first goal was to learn about the spaza shops in Monwabisi Park. We wanted to hear from the shop owners about why they started their shops, how they run their businesses, what problems they face, and how they feel about other spaza shops in the area.

After learning about the spaza shops, our next goal was to work with the Triple Trust Organisation to try to bring their business training program to Monwabisi Park. We also wanted to bring their Shop-Net programme to the area.

Our last goal was to work with the spaza shop owners in Monwabisi Park to form a group or association where shop owners could cooperate to derive mutual benefits.

Informal settlements have become widespread in South Africa, as people move to the major cities in search of employment but find very little. Having few alternatives, many people begin squatting on land at the outskirts of the cities. There is a large economic disparity between these peri-urban informal settlements and the central cities and wealthier towns in South Africa. Unemployment rates in informal settlements reached 50.8% in 2001 (Statistics South Africa, 2001). Unable to find work, some residents open small scale, informal businesses. These businesses provide vital goods and services to informal settlement residents, as well as stimulate economic growth by keeping and circulating money within the community. However, there is little existing collaboration or communication between these businesses, and they rarely have opportunities to learn from or support each other. In addition, many of these small business struggle to access banks, credit, and business support and training and must compete against larger, more established businesses.

One type of small business found in informal settlements throughout South Africa is the spaza shop. Spaza shops are small, home-based retail stores that typically sell basic goods such as groceries, cigarettes, and fuel to nearby residents (Manna, 2009). They also offer a method of survival for the people running them, as a spaza shop will often be the shop owner’s primary source of income, and potentially will also allow the owner to support other family members. They benefit informal settlements in several ways: they offer convenient access to basic necessities; keep the money inside of the community, rather than sending the money out of the community when people travel long distances to a supermarket; offer vital goods to local residents on credit when they cannot immediately afford to pay; and can offer goods for longer hours during the day than many larger retailers (Ligthelm & van Zyl, 1998).

In accomplishing our goals mentioned above, we executed a number of measures which we believed would allow us to help shops in Monwabisi Park. Our first goal upon arriving in Monwabisi Park was to map all of the spaza shops in the settlement, in order to determine how many shops there were and better understand the range of spaza shops that exist. After mapping the spaza shops in Monwabisi Park, we conducted detailed interviews with eleven spaza shops that were chosen randomly from the shops we had identified through the mapping exercise, in order to gather more in-depth information in the following key areas. After conducting interviews, we held a focus group discussion with several spaza shop owners from Monwabisi Park. The next phase of our project was to actually begin implementing the TTO programs through a second focus group discussion with spaza shop owners. The final phase of our project was to attempt to create a forum for communication and collaboration between spaza shop owners by forming a spaza association in Monwabisi Park.

Through our extensive work, we were able to develop a map of a 90 spaza shops in Monwabisi Park. Through our key informant interviews, we were able to gain an understanding of the spaza market in terms of the issues they are facing and general information about the shops. By holding focus group discussions, we were able to create conversation among spaza shop owners about the problems they face as a business owner and to introduce them to the TTO’s programmes and how they could benefit if they signed up. As a result of the meeting, eleven shop owners officially signed up for Shop-Net and thirteen people signed up for a business training session. And lastly, the groundwork for a Monwabisi Park Spaza Association was laid out, in which they will be working with the Imvuseleo Business Network, an association of spaza shop owners in Harare.

We are left with a unique body of knowledge and experience that we have acquired as a result of our work. While we are by no means experts on working with spaza shops, we have generated many ideas and insights into working with them, particularly in Monwabisi Park. Learn more about some of our ideas as to recommendations for actions that may be taken to further strengthen the spaza market.